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3.9 To stay lean and efficient, the public sector must
continually examine which services it should deliver
itself, and which ones are better outsourced to the
private sector. Under the Best Sourcing initiative,
the Government will market-test non-core functions,
and outsource those that the private sector can deliver
more cost-effectively, so that the Government can focus
on its core functions.
3.10 So far 2.4% of non-core functions in the public
sector have been market-tested. These functions include
IT infrastructure services in the CPF Board, valuation
of industrial properties in IRAS, and the provision
of survey services under JTC. Of the 82 projects that
have been market-tested, 52 were eventually contracted
out, resulting in $57 million worth of contracts for
the private sector and $9 million in annual savings
for the public sector.
3.11 This is just a very modest start. In FY2005, public
sector agencies will be encouraged to market-test more
non-core functions so that by the end of the fiscal
year, at least 20% of non-core functions in the public
sector will have been market-tested. The agencies will
ensure that Best Sourcing does not affect the smooth
delivery and quality of these services. They will also
work closely with the unions to give public officers
affected by outsourcing as much early notice as possible.
The affected officers will be offered redeployment if
possible, or else released on equitable terms. They
will be treated fairly, not just to keep up the morale
of other officers, but also to fulfil our moral obligation
to those who have served loyally and well, often for
many years.
3.12 The Public Private Partnership (PPP) initiative
is an extension of the Best Sourcing concept. PUB recently
awarded a PPP deal to the private sector to design,
build and operate the new Ulu Pandan NEWater Plant.
Other PPP projects we are exploring include the development
and operation of a new Incineration Plant and an Integrated
IT platform for Trade and Logistics. We expect to close
these PPP deals in FY2005. The public sector is also
studying the use of PPP for other large projects, such
as the new Sports Hub and new student housing and ancillary
facilities at the National University of Singapore.
The Government will consider the PPP approach for new
infrastructure projects where the private sector can
add value.
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